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State drops home inspection contract

The deal to help launch My Safe Florida Home was wrongly handled, officials say.

By IVAN PENN
Published February 6, 2007

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State officials have terminated a contract with the nonprofit organization hired to help launch the My Safe Florida Home program, stating the agreement improperly escalated from $457,000 to $2.9-million.

The Department of Financial Services informed the nonprofit Federal Alliance for Safe Homes, or FLASH Inc., on Jan. 17 that it was “legally impossible to proceed further under our present contract” because the changes were not advertised or properly explained when the amendments were made.

Last month the St. Petersburg Times reported that the state had given FLASH a no-bid contract to assist with the pilot phase of My Safe Florida Home, a $250-million state program to fortify homes against hurricanes.

Financial Services chief of staff Rick Mahler said then that the no-bid contract to FLASH was appropriate, even as its value escalated sixfold to nearly $3-million, because “no one lifted a finger to say they could do any of this.”

But now documents obtained by the Times show that more than a dozen companies had filed reports stating their abilities and interest in working on virtually every aspect of the program.

Documents also show that former state Chief Financial Officer Tom Gallagher planned to give the contract to FLASH from the get-go — before the state solicited other companies about the work.

After taking over the department last month, newly elected CFO Alex Sink’s administration terminated the agreement when a review of the Florida code revealed problems with four changes in the contract totaling $2.5-million.

“As the contract was expanded, the state did that improperly,” said department spokeswoman Tara Klimek, adding that FLASH had done nothing wrong and had fulfilled its contractual obligations. “CFO Sink, she is very concerned about making things accountable.”

“This change was in no way related to FLASH or our role,” Chapman-Henderson said.

The revelations of the troubles with the contract come as the state’s implementation of the My Safe Florida Program has increasingly come under fire.

A study committee created by the Legislature last month is scheduled to meet Thursday in Tallahassee to review ways of moving the program forward.

The program began last summer but mostly has stalled. It offers free home inspections to strengthen a residence against hurricanes. If problems are identified, the program offers matching grants up to $5,000 for qualified homeowners who need repairs.

Financial Services is not expected to continue conducting the free home inspections until at least mid March after the department picks another company to manage the inspection process. Meanwhile, the state has a list of more than 50,000 homeowners awaiting inspections.

To date, about 14,000 homeowners have received the free home inspections, but no one has received a grant or had their house repaired.

Some local government officials criticized the program in December for failing to strengthen a single home during the first seven months it was in operation. They also complained about a state decision to direct the lion’s share of a $100-million federal grant to the hurricane mitigation effort rather than to help victims of a 2005 storm.

Now some business owners say they are angered not only by how much FLASH’s contract escalated, but also that it appears the state planned to direct the work to FLASH from the beginning without consideration of any other firm.

State documents reveal that Gallagher had signed off on the agreement to give FLASH the contract for $457,000 on May 10, five days after lawmakers passed the bill creating the hurricane mitigation program. The documents say that the state would begin advertising July 10 that it intended to give FLASH the contract.

On May 22, Financial Services issued a “Request for Information” from companies that perform home inspections for their ability to survive hurricanes. The information request noted that no contract would be awarded as a result of responses to the inquiry.

More than a dozen firms filed 1,400 pages of documents. Several said they could handle part, if not all, of the My Safe Florida Program.

On July 10, Financial Services posted the advertisement that Gallagher had approved two months earlier, stating the department’s intent to give FLASH the contract “not to exceed an amount of $457,000.”

That contract then grew from an announced $457,000 to $2.9-million. It was unclear Tuesday how much of the $2.9-million FLASH had received.

Gallagher did not respond to messages left on his cell phone. Mahler could not be reached.

In awarding the contract, the department said FLASH was “uniquely qualified,” which was why the state was not going through a bidding process.

FLASH is a private, nonprofit organization based in Tallahassee that provides consumer information and training to help protect homes against disasters. The 8-year-old organization, founded largely by the insurance industry, was one of the leading advocates in the creation of My Safe Florida Home.

In response to criticism about FLASH’s selection for the pilot, Chapman-Henderson, the organization’s chief executive officer, questioned: “Who could have done this at this cost with this tremendous outcome?”

Todd Shumway, owner of Don Meyler Inspections, one of the companies that responded to the request for information, said his company could have worked on the pilot phase and other aspects of the program.

“Is the state hand-picking FLASH?” Shumway asked. “The whole thing doesn’t seem like it’s going through the due process.”

Michael Rowan, owner of Ameripro Inspection Corp. and Inspection Depot, said his report should have made it clear that his company not only was interested in participating but could have handled the job.

Chapman-Henderson said that while the companies that responded to the information request could have performed the inspections, her organization’s responsibility was to design the whole system.

“We were contracted with to help them design the comprehensive, uniform system for managing the program,” Chapman-Henderson said via e-mail.

For future inspections through the program, Sink is required by state law to issue a Request for Proposals from inspection firms. FLASH cannot participate.